This roundtable discussion took place at Money 20 20 in October. This first session concentrated on digitisation within the industry. The second section dealt with disruption in the industry. This article appeared in the November issue of IBS Journal.

Arron Spradlin CEO, CleverDome

Ahmet Tuncay CEO, Sepior

Ryan Victor Sales executive, Mambu

Frank Wiener Chief marketing officer, Sepior

Ryan Wilk Vice president of delivery, NuData Security, a Mastercard company

IBS Journal senior editor Bill Boyle kicked off proceedings with a comment about how exciting the world of fintech is at the moment. “It’s quite staggering when you look at the number of the countries with millions of unbanked people and the potential for development of those markets,” he suggested.

Warwicker: A lot of the activity we’re seeing driven through the consumer retail base is very exciting and there are great opportunities within that. Due to the risk profile and volumes/values, it isn’t an enormous step to take from that to the transaction banking business. Through digital we’re gaining an understanding of what those customers want from the point of view of convenience, transparency, and choice. In other words, what they want, when they want it, how they want it. That’s what it’s all about and using those new technologies to explore different means to deliver payments, lending, insights, whatever it may be, to our customers.

Whether that’s through a collaboration with fintechs, whether it’s working with big tech companies, whether it’s taking investment stakes, whether it’s something we build on our own, we’re very much aware of where our capabilities are and our core business is, but aware that also we need to develop and evolve as the fintech ecosphere is developing as well.

Sometimes the customers come to us with their ideas and then we look to either work with them and/or we look for the right capabilities to bring in from the outside to develop proof of concepts as quickly as possible to validate ideas. But the idea is we’re looking at as many things as we can that meet with our business strategy.

Bill: There are a number of campaigns in the UK, about keeping branches open. Are there any particular demands that customers are making?

Warwicker: We’re dealing with corporates and financial institutions. What these guys are looking for is speed of the transaction, transparency into their activities, a lot of data-driven insight. They’re looking for means to make payments in new and evolving ways. You need to have other ways to make payments; I want to have faster and better insight into my liquidity situation and options around that. Again, it’s optionality, transparency, data-driven insight and the ability to move quickly.

Batine: Our recent appointment, our chief digital officer, has no banking background whatsoever. He’s looking at things saying, “Why are we doing it this way? How can we move faster? How can we accelerate our API strategy?” One of the things we did around that was acquire a Mumbai-based API speciality team.

Those guys have an age of experience working with the India market and their capabilities were really great. We’re looking at developing further cloud strategy and such. That’s what everyone is doing. It’s what the incumbents have to do too. You have to provide the value of putting your products within that ecosystem within that platform, and you have to do it quickly.

Wilk: One of the things we see is the need for more intelligent networks when it comes to data privacy, data nationalism, those kinds of things. We’re playing a lot with a concept we call collaborative AI where, for instance, I may have something happening in India, where I have access to the data but that data is not allowed to leave the country.

But collaborative AI allows me to share the intelligence extracted from the detailed data into the larger network, and I see the networks becoming way more intelligent in what intelligence it’s sharing and having AI at its basis to help facilitate – how do we communicate the right intelligence without impeding on consumers’ privacy or regulation around data nationalism and so forth.

Gerber: Since the 2008 financial crisis, the subsequent regulations that were created really handcuffed them in a lot of ways over the past 10 years to be able to execute and change quickly. The regulations that were onerous and unnecessary are starting to drop away and now the financial institutions can start innovating. I would challenge you though because I seem to go to the grocery store all the time and stand behind the lady that is writing a cheque.

You’re not going to have one form factor that’s going to kill another. It’s just going to be multiples of new form factors that come through. If there’s anything that’s under threat from all of this innovation it’s probably cash.

Bradley Burgess: Most of our clients are a little more wealthy on average. Typically the wealth management space wasn’t serving the digital advice robo-platform, consumer platforms. But that amount of transformation, innovation and growth, I think it’s created a little bit of this interest – the larger banks are looking down into this space and seeing what’s happening in Silicon Valley across the wealth management base, firms like Orion, how big they’ve become, and going, partner, buy, defeat.

Whether you partner, buy or defeat, either way, it comes in the digital transformation. So, how do you absorb them? Do you leave them separate? Do you set up a separate company and do it? This is where it’s really exciting right now. It seems the banks are coming out and going, okay, we got cash.

We’re excited about what’s happening here. Are we going to build our own digital advice platform? Are we going to partner the digital advice platform? In the meantime, what seems to be driving it is their fear of Amazon and Google getting in their space.

Warwicker: Countries such as the UK through regulation are driving innovation, and I think we really have moved to collaborate. The banks have the reach. They have the customer base. They have the experience with some of the less fun stuff, the securities, the controls, and regulation. But they know they can’t move as quickly as the fintechs in all areas.

A lot of fintechs are very focused on specific problem areas. That’s where that collaboration really can benefit. Building that ecosystem with the right partnership where there’s something in it for both sides.

Spradlin: This year we said we think we can have a tie-in to an API, do some AI conversation and tap into their account API and communicate with Orion’s platform. In six weeks we were able to get up there and do the demo. We’re able to have a conversation, asked the questions, personalise those questions and then ask about the account information, pull down the account information and set up an account – all by voice. We did all that in Alexa. Hallett If somebody comes to you and says, VPN versus some other technology, do you really care?

Warwicker: No, and the client wants what they want. They don’t really care about what happens behind the curtain, provided it delivers the value they’re looking for, efficiently and securely.

Wilk: They want to be safe and secure.

Warwicker: Absolutely. That overrides everything, the security aspect, the trust. That’s critical. That’s part of the driving principles to everything you do. But beyond that, how can we do this from, as you say, the core, the legacy itself isn’t just sitting still either. We are working at that. We are modernising architecture continually and that enablement is there. But, yes, we must keep everything safe and protected. But the ability to quickly test out new technology through PoCs is something we’ve had a lot of success with in the last couple of years. The team I work with, the digital product development team, we’re turning things over quickly to see whether it works. The bank’s willingness to enable that is 100% there, that’s what the bank wants to see.”